Correlation Between Alam Sutera and Ciputra Development
Can any of the company-specific risk be diversified away by investing in both Alam Sutera and Ciputra Development at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Alam Sutera and Ciputra Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alam Sutera Realty and Ciputra Development Tbk, you can compare the effects of market volatilities on Alam Sutera and Ciputra Development and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Alam Sutera with a short position of Ciputra Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alam Sutera and Ciputra Development.
Diversification Opportunities for Alam Sutera and Ciputra Development
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alam and Ciputra is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Alam Sutera Realty and Ciputra Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ciputra Development Tbk and Alam Sutera is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Alam Sutera Realty are associated (or correlated) with Ciputra Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ciputra Development Tbk has no effect on the direction of Alam Sutera i.e., Alam Sutera and Ciputra Development go up and down completely randomly.
Pair Corralation between Alam Sutera and Ciputra Development
Assuming the 90 days trading horizon Alam Sutera Realty is expected to generate 0.99 times more return on investment than Ciputra Development. However, Alam Sutera Realty is 1.01 times less risky than Ciputra Development. It trades about 0.01 of its potential returns per unit of risk. Ciputra Development Tbk is currently generating about 0.0 per unit of risk. If you would invest 14,300 in Alam Sutera Realty on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Alam Sutera Realty or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alam Sutera Realty vs. Ciputra Development Tbk
Performance |
| Timeline |
| Alam Sutera Realty |
| Ciputra Development Tbk |
Alam Sutera and Ciputra Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alam Sutera and Ciputra Development
The main advantage of trading using opposite Alam Sutera and Ciputra Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alam Sutera position performs unexpectedly, Ciputra Development can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ciputra Development will offset losses from the drop in Ciputra Development's long position.| Alam Sutera vs. Bumi Serpong Damai | Alam Sutera vs. Summarecon Agung Tbk | Alam Sutera vs. Lippo Karawaci Tbk | Alam Sutera vs. Ciputra Development Tbk |
| Ciputra Development vs. Summarecon Agung Tbk | Ciputra Development vs. Bumi Serpong Damai | Ciputra Development vs. Adhi Karya Persero | Ciputra Development vs. Wijaya Karya Beton |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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